Why knowledge brokers are ready for shaping sales | Professional Capital


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Salespersons as internal knowledge brokers and new products-selling.

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Why knowledge brokers are ready for shaping sales | Professional Capital

  1. 1. Salespersons as Internal Knowledge Brokers and New Products Selling: Discovering the Link to Genetic Makeup (forthcoming in the Journal of Product Innovation Management) Wouter E. van den Berga b Willem J.M.I. Verbekea d Richard P. Bagozzic Loek Wormd Ad de Jonge Ed Nijssene Wim J.R. Rietdijka a Department of Marketing, Faculty of Business Economics, Erasmus University, Burgermeester Oudlaan 50, PO Box 1738, 3000 DR, Rotterdam, The Netherlands b Department of Psychiatry, Erasmus University Medical Centre, Rotterdam, Dr. Molewaterplein 50, PO Box 2040, 3000 CA Rotterdam, The Netherlands c Ross School of Business and College of Pharmacy, University of Michigan, 701 Tappan St. Ann Arbor, MI 48109-1234, USA d Institute of Sales and Account Management, Erasmus University, Burgermeester Oudlaan 50, PO Box 1738, 3000 DR, Rotterdam, The Netherlands e Department of Innovation, Technology Entrepreneurship and Marketing, School of Industrial Engineering, Eindhoven University of Technology, Den Dolech 2, PO Box 513, 5600 MB Eindhoven, The Netherlands 0
  2. 2. Biographic Mr. Wouter van den Berg is a doctoral candidate in the Marketing department of the Erasmus School of Economics, Erasmus University Rotterdam, the Netherlands. He has an MSc in Marketing from Erasmus University Rotterdam, and an MSc in Neuroscience from the Erasmus Medical Center. Wouter’s dissertation research focuses on the neurobiological correlates underlying salespersons’ performance and sales strategies. He has published in the Journal of the Academy of Marketing Science; a publication awarded with the Sheth Foundation Best Paper Award 2012. Willem Verbeke studied Philosophy (University of Ghent Belgium) and received his Ph.D. Educational Psychology from the University of Pennsylvania. His research focus at the Erasmus School of Economics is entirely on sales management; especially how it relates to a wide range of topics like: knowledge based marketing, emotions, neuro-economics, neuroscience, endocrinology and molecular genetics. He is also the founder of ISAM the leading institute of sales education in The Netherlands, Founder and co-director of Professional Capital a firms specializing in training and InsightYou a firm that applies genetic testing of salespeople. Verbeke Published in major journals as Journal of Marketing, Journal of Marketing Research, Journal of Applied Psychology and Journal of Management Richard P. Bagozzi is the Dwight F. Benton Professor of Behavioral Science in Management at the Stephen M. Ross School of Business at the University of Michigan. A PhD graduate of Northwestern University, Professor Bagozzi holds honorary doctorates from the University of Lausanne, Switzerland, the University of Antwerp, Belgium, and the Norwegian School of Economics. In addition to serving as a Senior Fulbright Research Scholar at the University of the Saarlandes in Germany, he has been awarded the Medal of Science by the University of Bologna, Italy. Loek Worm is director of the academic Institute for Sales and Account Management (ISAM) at Erasmus University Rotterdam (The Netherlands). He earned his Master of Science in Business Economics at Erasmus University Rotterdam. His professional and research interest is in the biology of (sales) performance and neuroscience. He has published in journals, like the Journal of the Academy of Marketing Science and the Journal of Neuroscience, Psychology, and Economics. Ad (Addy) de Jong is an associate professor at the Innovation, Technology Entrepreneurship, and Marketing (ITEM) group of Eindhoven University of Technology. He holds a PhD from Maastricht University. He taught PhD courses at Aston Business School (UK), Technical University Darmstadt (Germany), Aalto University (Finland), Maastricht University (Netherlands), Autonomous University of Madrid (Spain), University of Ljubljana (Slovenia), European Business School (Germany), and University of Newcastle, (Australia). He has published in Journal of Marketing, Management Science, Journal of Management, Journal of Management Studies, Journal of Service Research, Journal of the Academy of Marketing Science, International Journal of Research in Marketing, and Journal of Retailing, and Decision Sciences amongst others. He serves as a member of the editorial review board of Journal of Service Research. Ed Nijssen (1963) is a Professor of Technology Marketing at the Innovation, Technology Entrepreneurship and Marketing (ITEM) group of the School of Industrial Engineering, Eindhoven University of Technology and holds a PhD from Tilburg University (The Netherlands). He was a visiting professor at Michigan State University, New York University, 1
  3. 3. and Bocconi University (Italy), and taught Phd courses at the Swedisch School of Economics and Business (Helsinki) and Fudan (Shanghai). He also served on the Executive Committee of the European Marketing Academy. His research interest focuses on marketing and sales of new products, service research and relationship marketing, as well as on international marketing. He has published in the Journal of the Academy of Marketing Science (JAMS), International Journal of Research in Marketing (IJRM), Journal of International Marketing (JIM), Journal of Product Innovation Management (JPIM), and Long Range Planning (LRP) among others, and he also is the author of several books. 2
  4. 4. Salespersons as Internal Knowledge Brokers and New Products Selling: Discovering the Link to Genetic Makeup Abstract Managers increasingly realize the importance of involving the sales force in new product development. However, despite recent progress, research on the specific role of the sales force in product innovation related activities remains scarce. In particular, the importance of a salespersons’ internal knowledge brokering has been neglected. This study develops and empirically validates the concept of internal knowledge brokering behavior and its effect on selling new products and developing new business, and explores whether a salesperson’s internal brokering qualities are determined by biological traits. The findings reveal that salespeople with the DRD2 A1 gene variant engage at significant lower levels of internal knowledge brokering behavior than salespeople without this gene variant, and as a result are less likely to engage effectively in new product selling. The DRD4 gene variant had no effect on internal knowledge brokering. Management and future research implications are discussed. 3
  5. 5. Introduction The launch and commercialization of new products are vital for company performance yet pose enormous challenges for most firms, particularly in today’s hyper competitive knowledge intensive economy (e.g. Di Benedetto, 1999). New products provide the grounds for next generation growth and continued firm survival (Cohen, Eliashberg and Ho 1997; Danneels 2002). As knowledge brokers, salespeople are pivotal both in helping new products succeed in the marketplace (e.g. Verbeke, Dietz, and Verwaal, 2010; Rodan and Galunic, 1999), and advocating innovation (Ernst, Hoyer, and Rübsaamen 2010; Hargadon, 2005; Obstfeld 2005). Firstly, recent findings demonstrate an increasingly active and significant role for salespeople in this new business development process (e.g. Di Benedetto 1999; De Brentani 2001; Michael, Rochford and Wotruba 2003; Song and Montoya-Weiss 1998). As most new products are not perfect, salespeople need to engage customers in reciprocal information exchange to position innovations carefully, help customers link them with their specific needs, and explain features and usefulness of these new products convincingly (Webb, 2011). Secondly, successful salespersons transfer and then discuss their acquired knowledge about customer cognitions and preferences as well as market dynamics to fellow sales colleagues and colleagues from other departments internal to the firm (e.g., new product development managers) so that these actors too can benefit from the information and enhance their business (process) decisions (Rosa et al. 1999; Ernst, Hoyer, and Rübsaamen 2010). Such a view is consistent with the absorptive capacity of the firm, which contends that firms source knowledge outside their boundaries (Cohen and Levinthal 1990). 4
  6. 6. Remarkably, while the concept of knowledge brokering has received some attention in the management innovation literature (Obstfeld 2005; Kirkels and Duysters 2010), little is known about this concept in the context of selling new products to existing and new accounts. As salespersons operate as boundary spanners, functioning between customers and people inside their organization (Adams, 1999), one can distinguish between salespeople’s external knowledge brokering behavior, which reflects sourcing and transferring knowledge from and with customers and internal knowledge brokering behavior, which concerns sourcing and transferring knowledge from and with colleagues within the company. Traditionally the role of external, customer-directed behaviors of salespersons has received most attention in the industrial marketing literature (Plouffe and Barclay 2007). The reason is that personal interactions with customers have been considered inherently part of the salesperson’s job. As a result, regular sales training and educational programs have put primary emphasis on instructing salespersons how to prepare for and approach customers. In contrast, both researchers and sales managers alike have paid little attention to internal brokering behavior. This is surprising as salesperson’s internal knowledge brokering behavior is a relevant but complex, ambiguous, and challenging activity, specifically regarding the sale of newly developed products (Plouffe, Sridharan, and Barclay 2009; Plouffe and Barclay 2007). The aim of this study is to investigate the antecedents and consequences of a salesperson’s internal knowledge brokering activities with respect to new product selling. Importantly, this study uses leverages information about the genetic make-up of salespersons to better understand what it means to be a successful internal knowledge broker and gain insight into potential pitfalls and opportunities regarding sales strategies 5
  7. 7. to employ. Genetic makeup refers to the entirety of an organism's hereditary information (also called “genome”) of a particular individual or organism encoded in DNA. It includes both the genes and the non-coding sequences of the DNA (Ridley 2006). Currently, the fields of behavioral genetics and neuroscience gain relevance into the field of management and organization behavior by explicating the impact of specific genes on behavioral orientations and behaviors (Johnson 2009). For instance, Nicolaou and colleagues (2008) found that 37-42% of the variance in different measures of entrepreneurial behavior could be attributed to genetic influence. Recognizing a parallel between entrepreneurship and the creativity and perseverance to sell new products, it is anticipated that there is a similar relationship between salesperson internal knowledge brokering behaviors and genetic makeup. Consistent with recent work by Bagozzi et al. (2012), who found an association between sales people’s customer orientation and genetic makeup, the presented study explores associations between internal brokering and genetic traits. In this study, a hypothesis driven approach is employed by focusing on two specific genetic variants, which are known to have a functional impact on brain activity. Importantly, their association with salespersons’ knowledge brokering behavior is tested. However, it is noted that, in contrast to research with higher-level social and psychological concepts, research on the identification of relationships between types of behaviors and genetic make-up is difficult to implement and still at an early stage of development in the management and social sciences literature. The article is organized as follows. First, a theoretical perspective on knowledge brokering regarding the sale of new products is presented. Second, a scale is developed gauging internal knowledge brokering behavior for selling new products. Third, we 6
  8. 8. hypothesize and test the association between two genetic variants that are known to affect dopamine system regulation, the DRD4 7R+ and DRD2 A1, and a salesperson’s willingness to engage in internal knowledge brokering behavior. A relationship between internal brokering and new product selling is also hypothesized and tested. After presenting the results, the theoretical and managerial implications of these findings are discussed. The results show partial support for our hypotheses. Specifically, the results demonstrate a link between internal knowledge brokering behavior and the DRD2 A1 gene variant, but not with the DRD4 7R+ variant. Additionally, these results demonstrate an indirect effect of the DRD2 A1 gene variant on new product selling mediated by internal knowledge brokering. This suggests that insight into the impact of the DRD2 A1 gene variant on a salesperson’s behavioral strategy can guide sales managers in their recruiting, training, and coaching efforts. By providing these insights, our study addresses the importance of internal navigation within the firm on salespersons’ performance (Plouffe et al. 2009) and adds to the emerging stream of research using biological explanations of behavior as an additional method to understand sales force’s behavior in general, and sales of new products in particular (e.g., Bagozi et al., 2012). Theoretical background A knowledge brokering perspective for selling new products A company’s capability to acquire and assimilate knowledge and then transform it into successful new products has been shown to be vital to the competitive advantage of firms (Hargadon, 2003; Zahra and George, 2002; Patterson, 1998; Hurley & Hult, 1998). 7
  9. 9. Therefore, a hallmark feature of firms’ innovation processes is the knowledge creation process, which is driven by individuals who operate within and between organizational departments (Nonaka and Takeuchi 1995) and those acting as knowledge brokers regarding the marketplace (e.g., Kohli and Jaworski 1990). Hence, innovation and knowledge brokering are closely related and fundamentally intertwined (Kirkels & Duysters, 2010). An early perspective on knowledge brokering conceived brokering as a set of activities aimed towards facilitating the flow of information between two or more actors (Gould and Fernandez, 1989; Obstfeld, 2005; Kirkels and Duysters 2010). For the “brokering agent”, an open network and the inherent information asymmetry lead to opportunities. For example, establishing unique ties to actors in social networks, that are not easily accessible by others, provides superior access to knowledge and information and subsequent leveraging opportunities. Burt (1992; 1997; 2004) provides insights on how to act when such “structural holes” arise and how brokering agents can benefit from the differences between actors in the network (known as the tertius gaudens strategy, Simmel 1950; Burt 1992). Structural holes refer to the absence of ties between two parts of a social network (Burt 1994). However, as Obstfeld (2005) argues, structural holes in open networks pose serious action problems. As the brokering agent benefits from the existence of these structural holes, s/he is not inclined to engage in activities aimed at combining the different individual stocks of knowledge into newly assimilated knowledge. This might result in competition, control and even manipulation, where brokers choose to move “accurate, ambiguous, or distorted information between contacts” (Burt, 1992, p. 33). By introducing tertius iungens (the third who joins), 8
  10. 10. Obstfeld (2005) addresses and solves this issue, showing that the ability of such an actor to combine knowledge, based on trust and repeated social interactions and exchanges of ideas is critical (Ahuja, 2000; Obstfeld 2005). Building on this, we define effective brokering as the ability to combine and recombine existing knowledge by bringing together different actors in one’s social network (inside and outside the firm), in an effort to maximize group rather than personal benefit (Verbeke, Belschak, Bagozzi, and Wuyts, 2011). Importantly, from this perspective, brokering does not require (immediate) reward or benefit for the brokering agent but rather a long-term view is a requisite. Salespeople hold an important brokering role. As a liaison between outside customers and conditions and trends in the environment, on the one hand, and colleagues inside the firm, on the other hand, salespersons can connect and recombine knowledge relevant to and about, for instance, the new product’s development process with knowledge about customer product experiences. Sales people who are aware of this important role will be better able to contribute to their firm’s short and long-term goals (e.g. selling new products). However, in their thought-provoking article, Radon and Galunic (2004) suggest that it is not only the network structure that counts, but also the network content that affects performance. They show that successful managers not only build better network structures but make sure to include people who possess heterogeneous knowledge. This increases chances of picking up “a wider array of information about current events, news and gossip, privileged by both a greater range of information circulating in the organization and the ability to test its accuracy through independent confirmation” (Radon and Galunic, 2004; p. 545). This suggests that the more a salesperson connects with a multitude of colleagues internally and explores the 9
  11. 11. information he or she has collected from outside, the richer ideas and scenarios will be developed that, if shared internally, will benefit the firm’s capacity to adapt to and drive the market. Lastly, salespeople are in a position where they can source relevant information from colleagues who work in relatively isolated departments inside their own organization as well as from external customers. The latter help salespersons imagine the market, conceptualize customer problems that are at the basis of new products, and then market better these new products (Schwab et al., 1985; Achrol and Kotler 1999; Vargo and Lusch 2004). Effectively transferring information from the external environment, such as customers, to internal parties of the firm (e.g. new product developers), is important for generating ideas around (new) product development as well as mustering support for developing new products in response to this latent need information. Internal navigation and knowledge brokering behavior Whereas external knowledge brokering behavior refers to salespersons’ actions to source and transfer new product (related) knowledge from customers, internal knowledge brokering reflects the sourcing and transferring of new product knowledge from and to colleagues of one’s own organization. Effective salespeople understand the importance of customer and market feedback for long-term firm success, and recognize that they themselves are the critical link within the network that drives the organizational learning process (McKee 1992). This requires sharing knowledge with colleagues to update their cognitive schemas (i.e., internal theories, new meanings, linguistic routines) (Boland and Tenkasi, 1995; Webb, 2011). By doing so, this helps the firm update its perception of the 10
  12. 12. environment, potentially changing its activities in the future (Argyris and Schön, 1978; Huber, 1991). Effective internal knowledge brokering means that salespeople discuss customer needs with colleagues and how to respond to these needs by developing new products (Ernst, Hoyer, and Rübsaamen 2010). This is particularly challenging since much of the knowledge transferred within organizations is tacit rather than explicit (Carlile 2002; Nonaka 1994; Spender 1996). This includes motivating colleagues to undertake specific actions. This motivation and mobilization of people are important and require instilling a new perspectives and the mustering of compliance and consensus (Noe et al. 2003). In the beginning, intra-firm (cross-silo) dissemination and recombination of knowledge will bring together different perspectives that might start out to be contradictory, producing creative abrasion, but will eventually drive organizational innovation (Brown and Duguid, 1991; Leonard-Barton, 1995). This promotes organizational learning and enhances the opportunity recognition capabilities and innovative success of the company (Hanvanich et al, 2006; Lumpkin and Lichtenstein, 2005). Internal knowledge brokering also requires political skill and social navigation (Plouffe and Barclay 2007). Consistent with this, communication and information exchange between sales and new product development departments, as well as crossfunctional participation on projects, have been found to be important catalysts of new product performance as well as how products can be more effectively brought to the market (Ernst, Hoyer, and Rübsaamen 2010; Montoya-Weiss and Calantone 1994). Other contemporary research has also shown an impact of the internal organizational environment on sales performance (Chakravarthy and Doz 1992). 11
  13. 13. In this reciprocal process, sales people will learn from the new product development staff too. Drawing on different information sources from inside the firm increases the quality of their network content, giving salespersons access to important new product and technology intelligence. Such information will be difficult to understand for the salesperson if s/he is not up-to-date with the latest technological advances and jargon of new product developers, something that can be overcome by long-term involvement and engagement in continuous conversations internally over time. Insight pertains, for instance, to the technical difficulties engineers faced and could or could not resolve and why. These processes will help the salesperson effectively deal with possible information ambiguity and to develop a solid, convincing, and appealing sales message for the new product (Singh 1993). Those salespersons who are more capable of extracting this technical intelligence and overcoming ambiguities will be better internal knowledge brokers and better able to contribute to the development and sale of new products. Salesperson’s internal knowledge brokering behavior and genetic makeup Our study addresses the question of whether salespeople’s engagement in internal knowledge brokering behavior for selling new products is associated with genetic makeup. As Kreek et al. (2005) argue, there are two strategies within molecular genetics for studying associations between genetic information (the genotype) and specific behavior (the phenotype). Clearly, rigorous assessment of the phenotype is essential in both approaches. However, both strategies differ on their experimental design parameters. 12
  14. 14. The first approach is an exploratory approach utilizing genome-wide association scans to identify chromosomal positions that might be associated with the behavioral phenotype (van der Loos et al. 2010). In such a design, research does not specify an a priori hypothesized link between the trait under investigation and specific genes, but scan up to one million pseudo-randomly chosen genetic markers in an effort to find an association between the genotype and phenotype. The main drawback of this approach is the need for large sample sizes due to the statistical power problem that arises when running one million tests in a single study. This is not only a practical issue: larger respondent groups potentially lead to more heterogeneous groups regarding, for example, age, occupation, experience, and genetic makeup. Secondly, any findings derived are less likely to directly contribute to social science knowledge since chances are high that any genetic marker that is found to associate with the behavior a) has not yet been characterized functionally, leading to possible validity issues regarding any causal relation of the genotype on the phenotype, and b) is not the exact marker that is causing the behavior, since the one million markers that are tested are just a representative subset of the total of three billion markers that make up our complete genetic code. As such, this approach focuses on gene exploration and is highly suitable as a starting point for those interested in exploring the biological rather than studying the behavioral impact of a particular genetic variant. The second approach is a hypothesis-oriented candidate gene approach: investigating specific genes based upon prior understanding of the phenomena (e.g. Bagozzi et al. 2012). In the candidate gene approach, knowledge about the biological and/or behavioral impact of genetic variants is used to a priori generate hypotheses about 13
  15. 15. an association between genes and the phenotype. Since these studies target specific genes, they require far smaller sample sizes. Importantly, when an association is found, existing knowledge about the functional impact of the genetic variant directly contributes to the understanding of the phenotype under study. Finally, drawing from an existing body of research to generate well-grounded hypotheses helps to overcome some of the validity issues that underlie genetic association studies. As such, candidate studies focus on theory testing. We suggest that this approach should be part of an iterative process in which future studies build upon, and eventually replicate and extend previous findings. Since the aim of our study is to acquire a better understanding of the impact of specific genes on internal knowledge brokering and selling new products, we take the candidate gene approach. Specifically, this study focussus on two genes that are known in the genetic literature to have a functional impact on the dopamine system and investigate their relation to salespeople’s level of internal knowledge brokering. Marketers have long been interested in motivational mechanisms related to proactivity, novelty seeking, and risk taking. For example, Raju (1980) discusses the role of arousal in novelty-seeking behavior. Such perspectives are outside-in approaches, so to speak, meaning that psychological constructs based on verbal representations by the researcher are used to represent and explain psychological processes underlying behavior of salespersons. From a biological or inside-out standpoint, by contrast, the neurotransmitter dopamine in people’s brain is known to underlie mechanisms related to reward (anticipation), motivation, and goal-directed behavior. More specifically, dopamine signaling in the brain has been implicated in what is called information or incentive salience, which has both perceptual and motivational features. The dopamine 14
  16. 16. system is hypothesized to transform neural representations of stimuli in the brain by converting an event or stimulus from a neutral “cold representation” (mere information) into an attractive and wanted incentive that can “grab attention” and which consequently motivates people to take actions to attain goals (Berridge and Robinson 1998). This study focuses on two plausible candidate dopamine gene variants that may be associated with a salesperson’s engagement in knowledge brokering behavior: the DRD4 7R+ and DRD2 A1 gene variants. These two gene variants affect dopamine activity in the brain, leading to increased compulsive and impulsive personality traits (Nicolaou et al. 2008, 2009). Studies using chemicals to artificially mimic the effect of the mutations have corroborated these processes. The blocking of dopamine functioning in the brain negatively influences one’s ability to shift cognitive strategies in adaptive ways, as this ability draws upon both emotional memory and working memory in complex ways (Lange et al. 1992; Mehta et al. 2004). Conversely, chemically increasing dopamine levels in the brain improves working memory, cognitive flexibility, and planning, and thus learning, in the long term (Cools et al. 2001, 2002, 2004; Mattay et al. 2002). Although active in intertwined pathways in the brain, the DRD2 A1 and DRD4 7R+ gene variants relate to different brain regions, and the traits associated with these mutations differ somewhat as well. The DRD4 7R+ gene variant, for instance, affects sensations of pleasure in response to risk taking. Carriers of the DRD4 7R+ gene variant also have lower sensitivity to risks and have a better ability to take a long-term perspective instead of pursuing shortterm goals. Nicolaou et al. (2008) argue that people with the DRD4 7R+ gene variant are more likely to engage in entrepreneurial activity because this variant increases the 15
  17. 17. pleasure from taking entrepreneurial risks even if these endeavors take a long term perspective. The DRD2 A1 gene variant is associated with impulsiveness and a short-term orientation. The DRD2 A1 gene variant is also associated with depression, anxiety, and impaired social functioning (see Hayden et al. 2010). These findings suggest that persons carrying this gene lack the necessary persistence and social ability to act as knowledge brokers and sell new products. What follows is the development of our hypotheses. For a detailed description of the neurobiology of the dopamine system, see Appendix 1. Hypotheses Dreber et al. (2009) found evidence for increased risk-taking behavior in carriers of the DRD4 7R+ gene variant (Dreber et al. 2009; Kuhnen and Chiao 2009). The DRD4 7R+ gene variant has also been associated with better cognitive performance and long-term outcomes of ADHD patients (see Cloninger 2004 for an overview). Adults carrying this variant are more likely to be divergent thinkers and involved in novelty seeking, which are key factors of successful knowledge brokering behavior (Ebstein et al. 1996). In a sales context, Bagozzi et al. (2012) showed that carriers of the DRD4 7R+ gene variant score higher on customer orientation. Carriers of this gene variant exhibit increased curiosity during conversations with customers about their (implicit) needs, and a greater willingness to actively search for novel solutions for their clients. They quickly sense opportunities for problems customers face and actively seek solutions for these problems. Based on these observations, it is proposed that carriers of the DRD4 7R+ gene variant more likely are good internal knowledge brokers. Because of their enhanced 16
  18. 18. divergent thinking and novelty seeking tendencies, people with DRD4 7+ are likely better at approaching people from different departments for learning about new developments and ideas than their counterparts without this gene variant. Carriers of DRD4 7+ also should come across as being enthusiastic and able to mobilize others. In effect they exchange their own views about customer and market changes readily and try to persuade colleagues (e.g., engineers, material managers, logistic specialists) to adopt new views and ideas, and thus develop novel solutions for customers. In addition, their lower sensitivity to risk makes them less afraid to debate with and convince pessimistic colleagues of different backgrounds and inclinations (e.g. engineers, cost accountants). Therefore, we predict that carriers of the DRD4 7R+ gene variant will display more internal knowledge brokering behavior. Thus we hypothesize: Hypothesis 1a: The DRD4 7R+ gene variant will positively affect internal knowledge brokering. The DRD2 A1 gene variant also affects dopamine signaling but is anticipated to have a different, negative impact on knowledge brokering behavior than the DRD4 7R+. First, people with DRD2 A1 gene variant tend to be impulsive and prone to addictive or inflexible behaviors. In the neuro-cognitive domain, these behaviors are characterized by the inability to adopt cognitive strategies well after receiving negative feedback. In line with this, Dreber et al. (2009) argue that people with this gene variant are oriented to short-term gratification and have difficulty engaging in long-term projects (and thus are low on persistence). Because new product development generally takes months or years, people with DRD2 A1 should have relatively more trouble engaging in such processes and remaining interested and engaged. 17
  19. 19. DRD2 A1 carriers versus non-carriers should be less capable of effectively creating, maintaining, and aligning the internal networks required for selling newly developed products. Furthermore, their impulsiveness may prove frustrating or offputting to engineers. New ideas and proposals on how to improve the new product and its positioning in the market presented spontaneously by such salespersons without proper preparation and planning may be experienced as disruptions and cause negative affect among sales colleagues and colleagues from other departments. As a result, this may undermine internal relations and knowledge exchange between the salesperson and his colleagues in the organization. Hence, we posit: Hypothesis 1b: The DRD2 A1 gene variant will negatively affect internal knowledge brokering. Next, we address the question that pertains to the relationship between internal brokering and the selling of new products. We expect that selling and knowledge brokering for new products will be correlated. Knowledge brokers need to meet a diverse set of people, which requires risk taking (e.g., “would different people in my network want to meet me?”) but also the ability to navigate in social contexts, initiating and developing instrumental social relationships. In a similar way, new product selling as a non-routine activity, involves risk taking. More specifically, propose that there will be a positive relationship between internal knowledge brokering and new product selling, and to the extent that they are heavily engaged in internal firm processes and networks, internal brokers will develop more knowledge about the new product and its unique values. This will make the internal broker more confident to approach and convince customers. Furthermore, based on this knowledge, salespeople should be more effective 18
  20. 20. in their communication of unique selling points of the new product to customers. The effective communications of unique selling propositions increases a product’s value perceived by customers and reduces the risk for price competition (Boulding et al., 1994; Kirmani and Rao, 2000; van Waterschoot & van den Bulte 1992). Consequently, internal knowledge brokering should also be positively related to new product selling. The longterm orientation and strong social skills associated with internal knowledge brokering will also benefit the complex and uncertain process of new product sales. This long-term orientation will help the salesperson to persevere. Due to their strong embeddedness in internal firm processes and networks, internal brokers possess a more solid knowledge base of new products. As a result, internal brokers should be more confident and better able to identify novel market opportunities, enter new markets, and successfully approach and convince new customers to buy their new products (e.g. Porath and Bateman 2006). Therefore, propose: Hypothesis 2: Internal knowledge brokering behavior will positively affect new product selling. Finally, predict that internal knowledge brokering plays a key intervening or transformational role. That is, propose that the aforementioned gene variants will influence internal knowledge brokering, and brokering, in turn, will influence new product selling. This is expected because internal knowledge brokering provides a basis for new product selling and facilitates its success. Hence, hypothesize: Hypothesis 3: The effect of genetic makeup on sales will be mediated by internal knowledge brokering. 19
  21. 21. Research Methodology Pre-study: Development of the internal knowledge brokering scale First developed a scale to assess a salesperson’s internal knowledge brokering skills and new product sales orientation. began by generating a pool of items drawing on both the existing brokering literature (Gould & Fernandez, 1989; Obstfeld 2005; Kirkels and Duysters 2010) and interviews with salespersons. Based on a pretest of 105 respondents, purified these items and used them to develop a valid and reliable measure of internal knowledge brokering skills and new product sales orientations, all in a relative short scale so as to be usable by researchers in larger studies of sales force behavior. Sample and Statistical Analyses. The sample (n=144) was obtained from sales people attending an executive sales course. The sample consisted of 73% men and 27% women. A total of 59% had worked from two to six years, 30% had worked more than six years, while 11% had worked less than two years. In terms of education, 45% had a university degree, while the rest were graduates of higher vocational schools. This represents a somewhat higher percentage of college graduates than is typical in European industrial sales jobs (cf., Verbeke and Bagozzi 2000). Scale Results. After inspecting the means and standard deviations of item responses, and based on an exploratory principle component analysis, selected 5 core items representing internal knowledge brokering and 3 items representing new product sales orientation. The items referred to discussions with colleagues of different departments in one’s firm with respect to changes in the marketplace, and customer needs, new products and new product ideas, and implications for the firm’s launch strategy (See appendix 2). An exploratory factor analysis confirmed that the items loaded on two factors according to 20
  22. 22. definitions of internal knowledge brokering skills and new product sales orientations, respectively: Eigen values of 4.16 and 1.14 respectively with loadings of .53-1.00 and .38-81. Cronbach alpha for the respective scales was .87 and .69. Main Study: Effects of genetic makeup on new product sales orientation as mediated by internal knowledge brokering To study the effects of genetic makeup, permission was obtained from the internal research review board (i.e., the ethics committee of the university) for conducting the research. The board gave its consent for collecting DNA data and self-reports on a questionnaire from a sample of sales people to test our hypotheses. Sample. A total of 191 sales people attending an executive sales course was invited to participate in the study. Of these, 14 had incomplete DNA data, leaving a total of 177 for genetic analysis. However, out of these 177, 7 respondents failed to respond to all items, yielding a final sample of 170 (response rate of 89%). The majority were men: 83% men and 17% women. The majority of people (50%) had worked from two to six years, 12% had less than two years work experience (which was defined as the number of years worked in the sale profession), whereas 38% had seven or more years of work experience. In terms of education, 49% had a university degree, while the rest were graduates of higher vocational schools. Similar to the pre-study, the percentage of college graduates is somewhat higher than typical in European industrial sales jobs (cf., Verbeke and Bagozzi, 2000). Genotyping of the DRD2 and DRD4 genes and their associated allele frequencies can be found in technical Appendix 1 (See Tables 1 and 2). Attendees of the executive education course were personally invited to participate in our research. 21
  23. 23. Participants were asked to donate their DNA and fill in a survey. Participants received no reward for participating, and were only informed about the purpose of the study after completion of the survey. Scale analysis. performed a maximum likelihood exploratory factor analysis with promax rotation on the 8 items (5 internal knowledge brokering, 3 new product sales orientations) and found two factors corresponding to the two key variables. The factors showed eigenvalues of 3.84 and 1.29, respectively, all items loaded appropriately on their respective factor loadings (range of loadings was .74-.93 for factor 1, .56-.90 for factor 2), cross loadings were equal to or less than .25 in all cases, and the factors correlated r=.44. Cronbach’s alpha reliabilities were .85 and .68, respectively. To test for discriminant validity of measures of internal knowledge brokering and measures of new product selling, used confirmatory factor analysis (CFA). Items were parceled to form two indicators per factor corresponding to internal knowledge brokering and new product selling (See Bagozzi and Edwards, 1998; Coffman and MacCallum, 2005). First, the findings for the two-factor CFA with the correlation between factors allowed to be a free parameter showed an excellent fit: χ2 (2) = 45.42, p = .00, RMSEA = .34, NNFI = .47, CFI = .82, and SRMR = .12. A χ2-difference test, χ2d (1) = 43.22 (p < .001), demonstrating that the measures achieve discriminant validity. Test of effects and mediation analysis. To test hypotheses first used the Process program developed by Hayes (2009, 2013). Table 3 and 4 present the findings respectively, for the models DRD2 and DRD4. As hypothesized, it can be seen in Table 3 that DRD2 has a significant negative effect on internal knowledge brokering, β = -.31, t = - 2.10, and internal knowledge brokering has a significant positive effect on new product selling, β = 22
  24. 24. .53, t = 7.65. Further, there is no direct effect of DRD2 on new product selling (β = .06, t = .42), but as hypothesized internal knowledge brokering mediates the effect of DRd2 on new product selling (Boot LLCI = -. 39 and Boot ULCI = -.02). As shown in Table 4, DRD4 does not significantly influence knowledge brokering (β = .08, t = .47), but internal knowledge brokering does significantly and positively affect new product selling (β = .53, t = 7.65). Next, DRD4 has a marginally significant direct effect on new product selling (β = -.25, t = - 1.77). However, internal knowledge brokering does not mediate the effect of DRD4 on new product selling (Boot LLCI = -.10 and Boot ULCI = -. 21). [Tables 3 and 4 about here] Discussion We studied the role of salespeople as internal knowledge brokers when selling new products and explored whether biological traits influence salespeople’s level internal brokering. First we conceptualized salesperson’s internal knowledge brokering in a new product selling context. This emphasis on internal brokering sheds new light on the role of salesperson’s new product knowledge sourcing and transferring behavior from and to colleagues within the organization. Second, we investigated associations between genetic make-up and internal knowledge brokering behaviors. Using the candidate gene approach we focused on two gene variants, the DRD2 A1 and DRD4 7R+ alleles, which functionally govern how the dopamine network works in the brain. Building upon a growing body of literature that links people’s brain functions to opportunity seeking, perseverance, cognitive flexibility, reward sensitivity, and risk taking, we hypothesized 23
  25. 25. that this signaling pathway in the brain plays a role in people’s ability to broker knowledge related to selling new products. The findings show that salespeople with the DRD2 A1 gene variant display significantly lower levels of internal knowledge brokering than salespeople without this variant. This result is consistent with findings in the basic brain research that has found that the variant is associated with inflexible, maladaptive behavior, and impaired social functioning. In our study, salespeople with strong proclivities for internal knowledge brokering were non-carriers of the DRD2 A1 gene variant. Such salespeople who turn out to be skilled in interpersonal communication take a flexible approach in their interactions, while adjusting their behavior based on feedback from colleagues and quickly reacting to new, emerging knowledge about their product. Also, these people are more effective in focusing on a long-term, rather than short-term, sales-perspective. Furthermore, in line with our expectations, our results confirm the effect of internal knowledge brokering on new product selling. This finding supports Plouffe and Baclay’s (2007) argument that sales people’s exploratory navigation within their own firm is important in developing knowledge needed for effective selling performance. However, whereas the results from Plouffe et al. (2009) were limited, we found clear support for their original conjecture. We believe that our development and use of the knowledge brokering concept and our focus on new product selling account for our positive results in this regard. Our finding suggests that the broker function and its impact on overall learning of the firm and the impetus to motivate sales employees to sell new products are key processes needed for successful selling in competitive knowledge intensive markets. 24
  26. 26. The results of our mediation analyses supported the proposition that, while success regarding new product selling may be learned, it also has a biological root. Some people seem to possess a natural tendency to engage in internal knowledge broker activates and thus are more successful in both developing new accounts as well as selling new products. In our study, we targeted genes in the dopamine pathway, building on previous findings linking dopamine gene variants to entrepreneurship (Nicolaou et al., 2011; Van der Loos et al., 2012). Our results extend prior research by identifying additional specific gene variants. It can be noted that, compared to results reported by Nicolaou et al. (2008), our level of variance explained by the genetic factors included is limited. However, Nicolaou et al. (2008) present cumulative effect sizes representing an entire genetic effect (including multiple genes, which probably interact amongst each other too). In our study, we focus on only two candidate genes, and our findings are consistent with effect sizes reported by Bagozzi et al. (2012) in a sales context. As is common in genetic research, the uncovering of genetic links is difficult to demonstrate, and particular genes by themselves typically explain small portions of behavior. Managerial Implications Our findings have important implications for sales management. To begin with, sales managers should realize that selling new products is a complex activity that benefits substantially from activities of internal knowledge brokering. The same is in fact true for new account development. Indeed, this showed that the two activities are linked in a synergistic way. 25
  27. 27. Second, our findings suggest that engaging in internal knowledge brokering depends, in part, on one’s genetic makeup. This suggests that managers should realize that knowledge brokering ability is partly related to salespeople’s inherited characteristics and that variation in dopamine activity in the brain, in particular, undergirds at least part of the variability in knowledge brokering behaviors. Important here to mention is the current dogma in genetics that individual genetic variants associated with complex behaviors, such as internal knowledge brokering in a firm, are never sufficient, nor required to produce specific behaviors. Instead, genes reveal a natural tendency to act in particular ways under specific conditions. This means that selection of employees based on genetic variants should not be emphasized solely or overemphasized. Nevertheless, managers can use the insights that differences in dopamine signaling in the brain underlie specific tendencies to be receptive to learning from training and coaching efforts to improve one’s selling skills. Based on the findings in our current study, we would therefore suggest focus on enhancing the cognitive flexibility of salespeople and making sure that their focus is on the long-term, rather than following urges for immediate gratification. Especially regarding the latter, managers should design programs in the light of the findings herein. As incentives have effects on the dopamine system, they could potentially be ideal instruments for making sure that salespeople become more focused on the long-term, rather than on short-term, success of the sales department. This should enhance their knowledge brokering skills and outcomes. Indeed, a closer look at the literature on selling new products supports the conclusion that managers should strive to make their salespeople more risk tolerant through coaching (Ahearne et al. 2010 and Fu 26
  28. 28. et al. 2010). Hence, experimenting with incentive systems to find the right balance for motivating salespersons to promote internal knowledge brokering may prove worthwhile. Limitations In designing our research, we made several necessary choices that placed some limitations on our findings. First, we conducted this study among salespeople from an executive course. Although this choice helped control for potentially confounding factors, it also limited the generalizability of our results. Replications in the form of, for instance, a field study would be useful to check the generalizability of our findings. The absence of objective sales performance measures is another limitation. Additional work on the foundational relationship between salesperson’s genetic makeup and internal knowledge brokering should therefore also examine how this link influences objective new product sales performance metrics. Finally, extra controls could have been included in the analyses to further enhance their robustness. For instance, sales employee innovativeness and external knowledge brokering capabilities could have been included as control variables. Future research What impact might our research have on the academic field of sales? As we move to an era of relatively easy and inexpensive methods of detecting biomarkers, such as genetic information or fMRI-based research, it is crucial to place emphasis on rigorously defining behavioral phenotypes. An important contribution of this line of research is the new perspective that we have taken in formulating our hypothesis: from the inner person – 27
  29. 29. specifically the dopamine system – to their actual outer behaviors or tendencies. This approach allows us to better understand the motivations and choices of salespeople. It is in contrast to the reverse order of the dominant research paradigm in the literature: from the outside in, using psychological constructs such as intrinsic or extrinsic motivation, measured by questionnaires alone to explain or predict behavior. To place our study in further perspective: the genetic differences we discovered were associated with phenotypes in what is known as “a healthy population”. Whereas most genetic studies to date have been clinical investigations of patients with mental or related problems versus healthy control subjects, our study explored biomarkers to yield insights into the everyday behavior of real sales professionals. It is more difficult to find genetic effects on ‘normal’ people than for clinically impaired individuals that display extremely abnormal behavior when contrasted with normal controls. Underlying our use of a candidate gene approach is our belief that artificially imposing concepts on biomarkers without a priori formulating a hypothesis as to how these biomarkers influence specific behaviors could jeopardize the validity of findings. Indeed, considering that the human genome consists of over three billion mutation sites, there is ample room for false positive findings (Storey & Tibshirani, 2003). In line with this, we acknowledge the ongoing debate in the scientific literature about the most suitable approach for genetic studies, where both GWAS and candidate gene studies have advantages and drawbacks (Tabor et al., 2002). Relevant here is the point that candidate gene studies are traditionally subjected to the criticism that only a few of them have been replicated in subsequent studies (Ioannidis, Tarone, & McLaughlin, 2011; Siontis, Patsopoulos, & Ioannidis, 2010; cf. Ioannidis, 2005). However, multiple reasons suggest 28
  30. 30. that we should not overly criticize or condemn the approach as unreliable and by doing so risk type II errors. For instance, many follow-up studies are typically conducted in different study populations and/or differ in the exact manner by which the phenotype under study is characterized (e.g. Noble, 1998; Palmer & Cookson, 2000). However, above all, the lack of a rigorous characterization of the behavior under study has severely hampered scientists’ ability to link genes to complex behavioral traits. To elaborate on this point, it is highly implausible if not nonsensical to suggest that there actually is a single gene that directly drives complex behaviors such as internal knowledge brokering. This means that genes found in candidate gene studies are most likely driving, or reflecting, underlying constructs that are ecologically valid, such as impulsivity, cognitive flexibility, or stress-resilience. To solve this problem scientists are beginning to recognize the need for studying endophenotypes that reside at lower, less complex levels of analysis, and that are “envisioned to involve fewer genes, fewer interacting levels, and ultimately activation of a single set of neuronal circuits,” (Gould and Gottesman, 2005, p 115). Therefore, our attempt to study candidate genes in the fields of marketing and sales should be regarded as exploratory efforts aimed at identifying which biological systems are involved. Based upon these issues and our findings, future research should explore specific variants of/and additional candidate genes related to these biological pathways. For example, there are different variants in both DRD2 and DRD4 genes that we did not study but which affect specific behaviors and are worth examining (e.g., impulsivity, incentive sensitization; Feldpausch et al. 1998; Oak et al. 2000). To further elucidate the causal pathways between genes and behavior, future research should use multiple biomarkers from several levels of analysis to gain greater 29
  31. 31. insight into these pathways. Importantly, this means that there should be a biologically plausible pathway connecting genes to the neurological activity in the mind. Whereas genes provide information on the molecular level, reflecting the incorporation of a more coarsely grained orientation, scans of brain activity (e.g. fMRI scans) could provide insight into which brain regions are activated (or not) and under what conditions. This may indirectly contribute to our understanding of what goes on in the minds of salespeople. The emerging applied science of genomic imaging-based sales management can make a critical contribution to the field of selling (and marketing) because such research lends itself to traditional paper-and-pencil scales, observational studies, as well as studies aimed at finding neurobiological mechanisms (e.g., endocrine, genetic, or fMRI studies). To conclude, the study of genetics for explaining social behavior in management science is only now emerging. However, it is already an exciting field that will further benefit from technical innovations in DNA sequencing methodologies, which will allow for low-cost and high-throughput data acquisition in the future. Therefore, genetic research introduces an interesting additional set of variables to study, potentially leading to more complete and robust explanations of sales force behavior and new product adoption. 30
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  41. 41. TABLE 1: DRD4 48bp VNTR allele frequencies, genotypes, genotype and classifications (N=177) Allele N % 121 68% 49 28% 7 4% HWE Groups Homozygote non-7R Heterozygote Homozygote 7R Genotype Classification *** No 7R 121 68% 7R+ 56 32% Total 177 100% ***Allele frequencies are in HWE equilibrium (χ2= 0.51 p-value = 0.47, one sided) 40
  42. 42. TABLE 2: DRD2 Taq1a allele frequencies, genotypes, genotype and classifications (N=177) Genotype N % T/T 58 33% C/T 79 45% C/C 40 23% Total 177 100% 72 41% T 105 59% Total 177 100% Genotype Classification *** No T ***Allele frequencies are in HWE equilibrium (χ2= 1.700 p-value = 0.192, one sided) 41
  43. 43. TABLE 3: Findings for mediation analysis (DRD2) Independent variables Constant DRD2 Knowledge brokering Coefficient 5.70 -.31 Effect .06 Effect -.17 42 Mediation model: Outcome model: New product Internal knowledge brokering as selling as dependent variable dependent variable SE t-value Coefficient SE t-value .10 59.25 2.47 .40 6.13 .15 -2.10 .06 .14 .42 .53 .07 7.65 F (1,168) = 4.39, p = .04 F (2,167) = 29.57, p = .000 Direct effect of DRD2 on new product selling SE T p .14 .42 .67 Indirect effect of DRD2 on new product selling Boot SE Boot LLCI Boot VLCI .088 -.3857 -.0221
  44. 44. TABLE 4: Findings for mediation analysis (DRD4) Independent variables Constant DRD4 Knowledge brokering Coefficient 5.55 .08 Effect -.25 Effect .04 Mediation model: Outcome model: New product Internal knowledge brokering as selling as dependent variable dependent variable SE t-value Coefficient SE t-value .09 61.60 2.58 .38 6.71 .16 .47 -.25 .14 -1.77 .53 .07 7.81 F (1,168) = .22, p = .64 F (2,167) = 31.57, p = .000 Direct effect of DRD4 on new product selling SE T .15 -1.77 Indirect effect of DRD4 on new product selling Boot SE Boot LLCI .08 -.10 p .08 Boot VLCI -.21 43
  45. 45. APPENDIX 1: TECHNICAL DETAILS ON DOPAMINE SYSTEM AND GENETIC CORRELATIONS In this appendix, the theory behind the dopamine system is presented. Furthermore, the procedure is explained by which the DNA samples are extracted and analyzed. Furthermore, the number of polymorphisms is presented and its associated HardyWeinberg equilibrium is calculated in order to satisfy certain criteria in genetics research. Dopamine system The brain’s dopamine system is complex. It includes various nuclei mainly involved in processing rewards, but also in cognitive and behavioral flexibility. The dopaminergic system forms a feedback loop around the nucleus accumbens (NAc) and the ventral tegmental area (VTA), which has an internal pacemaker potential maintaining an irregular, tonic-firing pattern. Additionally, the NAc receives input from the hippocampus, providing context and directing focus on tasks; the amygdala, mediating emotional salience; and the prefrontal cortex, enabling behavioral flexibility (Grace et al. 2007). When stimulated by rewards or learning about unexpected stimuli, dopaminergic activity in the VTA and subsequently the NAc has the potential to drive behavior. In short, the complexity of the system can be seen in efforts to attain flexible goal orientation, where humans have to manage the constant flow of novel and distracting stimuli through a valence threshold above which information must pass before it can be admitted to working memory and be processed in the prefrontal cortex (Savitz, Solms, and Ramesar, 2006). The presence of important often reward-based information then allows the prefrontal cortex network to respond to this information by updating the working memory system (Weinberger et al. 2001). Transitions are modulated through a well-balanced homeostatic process, heavily influenced by the different subtypes of dopamine receptors in the brain. Genotyping Buccal swab was used as the DNA source. The DRD2 Taq1 (rs1800497) and DRD4 48bp VNTR gene were analyzed according to current standards (e.g. Pfaffl, Horgan, and Demplfe, 2002). Respondents were instructed to rinse their mouths with water before swabbing. The DRD2 Taq1 genotype was assessed as an additive trait in the analysis. That is, the absence of a T (A1)-variant was coded as = 0; the presence of at least T (A1)-variant was coded as = 1. Variant frequencies are depicted in Table 2. The genotype of DRD4 48bp VNTR was also assessed as an additive trait. That is, the presence of a 7-repeat was coded as 1 and the absence of a 7-repeat was coded as 0 (see Table 3). The genotype distribution was tested against expected genotype frequencies according to the Hardy-Weinberg Equilibrium (HWE) model, an important control mechanism in genetic research. HWE states that there is a simple relationship between variant frequencies and genotype frequencies (Guo and Thompson 1992). The genotypes of DRD2 in our population were in agreement with Hardy-Weinberg proportions (χ2= 1.70 p-value = 0.192, one sided). The DRD4 genotypes in our population were also in agreement with the Hardy-Weinberg proportions (χ2= 0.51, p-value = 0.47, one sided). [PLACE TABLE 1 AND 2 AROUND HERE] 44
  46. 46. APPENDIX 2: STUDY CONSTRUCTS Internal knowledge brokering: 1. Regularly I talk with colleagues about what needs our customers have. 2. I always discuss with my colleagues how we could best place new products on the market. 3. I discuss with my colleagues how we alternative approaches for new accounts. 4. I regularly discuss with colleagues what the future could look like and what that would mean for our customers and company. 5. Sometimes I go to other departments in my organization to gain new ideas. New product selling: 1. I like to present my customers with our most innovative products. 2. I like selling products that need me to explain in great detail just what is new and exciting about them 3. I like to visit new accounts where I have to present what my company is selling. 45